Capital Asset Pricing Model
Please reply all questions.
- UPS, a supply providers firm, has a beta of 1.6, and Wal-Mart has a beta of zero.9. The danger-free fee of curiosity is 6% and the market danger premium is 9%. What's the anticipated return on a portfolio with 40% of its cash in UPS and the stability in Wal-Mart?2. A inventory market includes 4600 shares of inventory A and 1600 shares of inventory B. Assume the share costs for shares A and B are $15 and $30, respectively. When you've got $15,000 to take a position and also you wish to maintain the market portfolio, how a lot of your cash will you spend money on Inventory A?three.Suppose you've gotten $10,000 in money and also you determine to borrow one other $10,000 at a(n) 6% rate of interest to spend money on the inventory market. You make investments all the $20,000 in an exchange-traded fund (ETF) with a 11% anticipated return and a 20% volatility. What's your anticipated return in your funding?four. Your retirement portfolio includes 100 shares of the Normal & Poor's 500 fund (SPY) and 100 shares of iShares Barclays Combination Bond Fund (AGG). The worth of SPY is $118 and that of AGG is $97. If you happen to anticipate the return on SPY to be 11% within the subsequent 12 months and the return on AGG to be 6%, what's the anticipated return on your retirement portfolio?